Last night’s Insight focused on the tragedy unfolding in the housing market and it’s effects on the rest of the economy. It was good to see that Housing Supply side issues got some time on air, but again the property lobby had large numbers in the crowd, no NGO’s got a guernsey, the omnipresent Ross Gittins took the softly softly line and outside of Steve Keen, there was not the sort of hard hitting critique needed.

The Real Estate lobby again pushed for more land supply. Result - cheap land for speculators to extort the market. Someone mentioned building high speed rail to Penrith and surrounding areas. Result - the added benefits are capitalised into higher land prices - benefiting whom? Those speculators with inside contacts. Debt was mentioned at 7 times the average wage - yes, but why? The high cost of land due to land speculation, inefficient government developer charges and the failure to capture the economic rent. Supply side was mentioned by 1 young academic and a few others, but no one dared to mention how.

Supply side? 119,623 vacant homes in Melbourne. Supply would be increased if the most efficient tax of all is implemented, the one students are taught in economics as the most effective way for government to raise revenue with the least distortions. It’s called Land Tax.

Let’s rename it as a Site Rental. No one likes a tax. We don’t like how it is presently administered, but we agree with the property lobby that it should be set at a flat rate. However, we differ in seeing that it should be set at a higher rate, funding the abolition of income and sales taxes.

Holding charges on land are barely 2%, whilst land values have increased at over 10% p.a for over a decade. The two are inter-related. Increase holding charges and speculation is diminished. Land banking becomes no longer profitable. Read more here and on our sister website

But what did other bloggers say?

Andrew Sadauskas
It was a cold Thursday morning when I set out on my quest. My mission? To find the heart of Melbourne’s housing affordability and traffic problems. My quest took me to the middle of Melbourne’s great southeastern sprawl, which now stretches as far as Pakenham.

After a morning spent hunting for it on Melbourne’s public transport, I reached my unlikely destination: the carpark behind the Village Green Hotel, in Brandon Park.

On its asphalt surface stand the cars of about a dozen gamblers, who can’t resist their early morning gaming fix, and little else. Buried under its acres of asphalt, where the morning puters have parked, are several acres of land where houses don’t stand. Across the ever congested Springvale Road stands Brandon Park Shopping Centre; a shrine to the 1980s that Centro’s cash-strapped management now almost certainly regret buying.

If the Coliseum symbolises Ancient Roman cruelty, what does this carpark say about us? Are we addicted to the car like those punters at the poker machines inside? Are we willing to lose the house for our habit?

by Dave Wetzel

The income from fares is usually insufficient to pay for both the capital costs and operating expenses of a modern mass transit system.

Public transportation managers strive to provide safe, efficient, affordable, reliable, comfortable, clean, and convenient journeys for passengers. The service provided not only enables millions of …

Hobart has made it into the big league! - Leo Foley
Jan 23, The Mercury

House prices have pushed us into the top 20 of unaffordable cities in the world.
After seven years of boom, the legacy of this government, elected by ordinary
working people, will be a city owned …

Jeffery J. Smith, President, Forum on Geonomics
[A paper submitted to the BSA of the AIA, 2003]

Around the world, a few dozen cities collect ground rents - some of the money that people spend or are willing to spend on a location - rather than tax buildings and other economic goods. …